Renting or Owning – that is the Question

This Sunday in the “Weekend Pages” of the Financial Times Lucy Kellaway, a columnist and associate editor published an article titled “Why I would rather own a home than rent one”, passionately replying to a provocative article published 15 days ago by Ben Pentreath, an architectural and urban designer with the heading “Why I rent and would never buy,” describing two attractive and gorgeous properties that Mr. Pendreath rents in Dorset, west of England, and in a fashionable area in London (see links for full texts and photos to to the articles at the end).

After reading both articles, I have come up with two lists through my own interpretation of the different arguments presented in favor of either “renting” or “owning”:

The reasons to rent according to Mr. Pentreath:

1. To buy a magnificent and well located property as the ones that Mr. Pendreath has rent is very expensive and unaffordable to own.

2. Down payments and big long term mortgage is “a form of renting money, very expensively”

3. Friends that bought their home are burdened “with enormous debts and taken to purchase bad houses in very strange localities”, with decaying neighbourhoods with relatively poor services, schools and transportations.

4. The risk of buying in a bubble and suffering from the loss of property value when markets are in crisis or when the areas are in decline or not popular anymore. In that case, not only the prices go down, but selling could take months or some time years. Futhermore, many taxes and expenses related to the sales are yet to be paid.

5. No responsibility for maintenance fees, taxes or other expenses like roof leaks or a heating system blowing. “it’s not my problem, he writes…a simple call, and no cost” the owner will have “these things fixed”.

6. Expensive renovations like kitchens are generally speaking borne by the owners.

7. Liberty and flexibility to move or as he said “free to step away if I wish, never trapped by debt or my situation”.

Lucy Kellaway, on the other hand, defends the concept of buying in a passionate article where she sometime even seems a bit aggressive by criticizing Mr Pentreath’s article “superficially persuasive” but admits that she has some doubts about her “continued faith in home ownership”.

Again, based on her arguments, here is a list of reasons with my interpretation of her arguments in favor of owning:

1. Owning a house as a child has changed her life, offering security and stability, even when the property was sold.

2. Owned properties allow families to leave marks like planting a tree to keep vivid memories of their past. When driving by her old home, she writes, there is a feeling: “that is where my roots are. That house used to be ours.”

3. A tool of Investment that could be profitable if dealt with good care and blessed with luck. She described how profitable has been for her to own and sell their homes, making almost 400% profit on their first property.

4. Renting properties like those mentioned by Mr. Pentreath are not that available and are very expensive according to the research she made through the web.

5. Renters don’t have the freedom of planting and designing their own garden, and enjoying it in different seasons.

6. Not all landlords are good at fixing home problems like roof leaks or boiler failures.

7. Owning property gives children a sense of “responsibility” and permanence that a rented house cannot “even if the location of their home is in “unhandsome” neighbourhood or “places that Pentreath would hold in contempt”.

Clearly the arguments are true and valid on both sides which present personal preferences based on different experiences and backgrounds.

However, there are other considerations “for” or “against” the two options missing in the articles, particularly those issues that are contingent to the economic cycles which directly affects property prices, rents, interest rates and availability of credit.

Affordability and stage in life are two other important factors that varies from case to case. From the articles of Lucy Kellaway and Ben Pentreath that share their experience and preferences, it is obvious that both have the resources and, I assume, the freedom to decide to buy or rent, a choice that these days not necessarily everybody enjoys.

This interesting debate in the FT shows the diversity of human goals and aspirations. Finally, it all depends on personal taste, vision and circumstances, and is not restricted from certain sole rigid criteria.